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$4.5M from inlet lease sale Third largest in value since areawide sales began; dominated by Hilcorp Alaska Kristen Nelson Petroleum News
The Alaska Division of Oil and Gas took in $4.5 million at its Cook Inlet Areawide oil and gas lease sale May 8 in Anchorage. Division Director Bill Barron said the dollar value was the third largest for the Cook Inlet areawide sales (which began in 1999) and the sixth largest in terms of acreage.
The 2011 areawide Cook Inlet sale had high bids of $7.9 million, followed by the 2012 areawide sale with $6.9 million.
Barron said the interest in the sale speaks to “activity and potential” still available in Cook Inlet.
The state received 33 bids on 28 Cook Inlet tracts, 145,739 acres.
Hilcorp Alaska dominated the sale, taking 19 tracts for $2.7 million, 60 percent of the dollar value of the sale and 70 percent of the acreage. Cook Inlet Energy, with $871,200 in winning bids on five tracts, accounted for 20 percent of the dollar value of the sale and the 20 percent of acreage. Other winning bidders — Aurora Gas, William Crawford, NordAq and Woodstone Resources — each took single tracts.
Two other sales were also held May 8.
The state received no bids in the Alaska Peninsula areawide oil and gas lease sale and a single bid in the Augustine Island geothermal lease sale.
Substantial southern interest The heaviest bidding in the Cook Inlet sale was for tracts on the southern Kenai Peninsula. Barron said after the sale that acreage was picked up around Deep Creek, West Eagle and North Fork, as well as tracts farther north in the old Cohoe unit area.
Hilcorp Alaska spokeswoman Lori Nelson said the majority of the tracts on which Hilcorp bid are “just off the Deep Creek unit.” The company bid on 22 tracts, losing out on three; Nelson said Hilcorp took the tracts that “were critical for us in this sale.”
Hilcorp took four tracts north and south of Kenai, including two in the Cohoe area near Kasilof where Aurora Gas proposed a unit on state and Cook Inlet Region Inc. leases (the division denied the unit application in 2011); a single tract at Ninilchik off the southern end of the Hilcorp-operated Ninilchik unit; two tracts in the Anchor Point area; and a tract east of the Armstrong Cook Inlet-operated North Fork gas field.
Eleven of the tracts Hilcorp took are adjacent to or in the vicinity of a block of 10 tracts the company took in last year’s sale on the southern edge of the sale area in an undeveloped area east of the Deep Creek unit.
Hilcorp bids averaged $26.25 an acre. The company’s highest bid, $37.89 per acre, was for the tract adjacent to the southern end of the Ninilchik unit; most of the company’s bids were $25.26 an acre.
Mostly on west side Four of the five tracts taken by Cook Inlet Energy are on the west side, one adjacent to Apache tracts near West Foreland; two adjacent to existing Cook Inlet Energy acreage astride CIGGS, the Cook Inlet Gas Gathering System and one to the north, a tract crossed by the Enstar line and south of an existing Cook Inlet Energy tract.
Cook Inlet Energy outbid Hilcorp on a tract north of Armstrong’s North Fork unit on the southern Kenai Peninsula.
Highest per-acre bid Woodstone Resources, a Houston independent, bid $82 an acre on a 5,120-acre tract, the highest per-acre bid in the sale and the highest bid for a tract, $419,840. That tract is adjacent to Apache and NordAq acreage south of the Deep Creek unit.
NordAq bid $62.86 an acre for a tract adjacent to its Tiger Eye prospect on the west side where the company installed a pad and began drilling last year.
Aurora Gas bid $32.56 an acre for a tract north of Kasilof which contains the Cohoe well, outbidding Hilcorp and Cook Inlet Energy.
—A copyrighted oil and gas lease map from Mapmakers Alaska was a research tool used in preparing this story.
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